Despite the positive outlook for the nation's real estate market, as shown by record high sales in 2023, a number of underlying problems such as elevated interest rates and reduced affordability persist and provide obstacles.
Numerous major cities were affected, with Bengaluru seeing a 2% decrease in house sales from the same time last year due to a precipitous decline in the affordable housing market.
The real estate industry is banking on significant policy changes and budget allocation to support affordable housing and homebuying attitudes as the Union Budget 2024 approaches.
Experts predict a number of changes, including a streamlined single-window approval process and industrial status for the industry. In order to encourage entrepreneurs, the coworking and senior living industries are considering reducing the goods and services tax (GST) rate for small-scale coworking customers.
The following are the main goals for the real estate industry in Budget 2024:
Status of the industry and tax breaks
According to industry analysts, giving the real estate sector industrial status would draw investments and simplify procedures.
Additionally, the builders have asked that the tax credit on the interest paid on housing loans be increased to a minimum of Rs 5 lakh. The finance ministry should present the second tranche of the SWAMIH fund, with a corpus of Rs 50,000, in the upcoming union budget, according to Hari G Babu, president of the National Real Estate Development Council (NAREDCO). In addition, there should be other budgetary support and relaxations, such as allowing input tax credit under GST and providing incentives for rental housing, in order to meet the housing for all target.
Simplifying the clearance process with a single window can speed up project approvals, cut down on delays, and improve project execution in general. Revision of the GST input tax credit regulations would promote transparency and lower real estate costs.
The coworking industry demands adaptability from regional participants.
Manas Mehrotra, the founder of 315Work Avenue, a supplier of flexible office space, believes that a reduced goods and services tax (GST) for small-scale coworking customers would help the coworking sector grow its presence by attracting small companies and enhancing government revenue collection.
Furthermore, lowering the high stamp and registration fees or permitting the payment of twice the duty as an expense under income tax may motivate even little agreements to be registered, helping the smaller participants.
The senior living industry wants insurance policy changes.
According to experts, insurance in India mostly pays for medical costs, meaning that the elderly in particular require a lot more help than they already get. As a result, it is imperative that the Insurance Regulatory and Development Authority of India, or IRDAI, take these services into account while drafting insurance policies.
He went on to say that giving input credit reimbursements on costs associated with senior citizen upkeep is another likely solution to this problem. Refunds of input credits would encourage companies to provide senior-friendly amenities and services, which might lower expenses for the elderly.
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